Argentina's Fuel Ethanol Output Soars as Biofuels Policy Shifts Take Hold

Argentina's fuel ethanol output is expected to hit a new high of 1.35 billion liters in 2026, driven by strong local demand and expanded corn-based production capacity.

The government has reviewed its biofuels policy framework, and a regulatory change from March 2026 allows fuel distributors to voluntarily raise ethanol blending to 15%, exceeding the current mandatory 12% threshold.

Corn-derived ethanol is anticipated to make up about 60% of total production, with sugarcane-based ethanol covering the remainder. Biodiesel output is also set to expand, climbing 8% in 2026, but export volumes are predicted to fall to their lowest point since 2007.

The country's biofuels industry is undergoing a major policy shift, with new legislation proposed that would increase the ethanol mandate to 15% and the biodiesel mandate to 10%. The proposal has sparked discussion among stakeholders, with some supporting the changes and others opposing them.